Policyholder Rights: How to Push Back When Insurers Fail You

Whether it's life insurance, health coverage, or a unit-linked policy, every premium you pay builds an agreement based on trust. You’re promised support during emergencies, guidance in crises, and compensation when misfortune strikes.
But all too often, policyholders are left disillusioned. Claims are delayed without explanation. Valid claims are rejected on shaky grounds and no one helps the struggling policyholder to understand the situation. That is when Subject Matter Experts enter the game.

1. When Insurance Turns Against You Policyholders, especially the elderly or first-time buyers, are sold plans they never needed or understood. These issues aren’t just unethical—they’re a breach of rights and this breach is often referred to as insurance bad faith.

It occurs when insurers act dishonestly or unfairly during the claims process. While some cases are overt, such as a direct refusal to settle a valid claim, others are far more subtle, masked under insurance claim related issues and delays in claim process over technicalities and jargon.

Here are some warning signs:
● Unreasonable Delays in Claim Process: If weeks go by without clarity or response, something’s amiss.
● Misrepresentation or Mis-selling of Insurance Policies: When agents promote plans that don’t align with your needs or hide crucial terms, it’s a red flag.
● Sudden Claim Rejection Without Clear Reasoning: Especially troubling when all documents were submitted and your claim was well within coverage terms.
● Requesting Irrelevant Documents Repeatedly: This tactic is used to stall claims or frustrate policyholders into giving up.
● Lack of Guidance or Clarity About Policy Terms: You deserve to understand what you’re buying and what you’re entitled to.

These experiences aren’t just frustrating—they can also be legally questionable. And yes, you have the right to fight back.

2. Your Rights Under IRDAI

According to IRDAI regulations, a policyholder has the right to cancel a life insurance policy within 15 days of receiving the policy documents.

This free-look period allows the policyholder to thoroughly review the terms, conditions, and benefits of the policy after purchase. If the policyholder is unhappy with the purchase for any reason, they may cancel the policy during this period and receive a refund, subject to applicable deductions.

For policies purchased through electronic platforms or distance marketing channels, the free-look period is extended to 30 days. A similar provision also applies to long-term health insurance policies with a minimum term of three years.
If you cancel, the insurer will refund your premium after deducting:
● Risk premium for the days covered
● Medical test costs
● Stamp duty charges

For ULIPs, the insurer will repurchase the units at the value on the cancellation date.
ULIP policyholders can also:
● Make partial withdrawals
● Switch between funds
● Surrender the policy after the lock-in period
● Ensure nominees receive the death claim amount

You can also request changes in:
● Premium payment mode
● Policy term
● Sum assured
● Fund redirection (for ULIPs)

These rights ensure that you, as a policyholder, are never at the mercy of unclear terms or unethical practices.

3. What to Do If You Suspect Bad Faith
If your insurer is not acting fairly, here are some steps you can take:

1. Keep a Record of Everything

Maintain copies of your insurance policy, all correspondence, claim forms, and proofs of communication. Documentation is your strongest defense.

2. File a Formal Complaint
Start by contacting your insurer’s grievance redressal cell. Make your complaint clear, specific, and refer to policy clauses wherever applicable.

3. Escalate If Not Resolved in 30 Days
If you receive no resolution within a month, you can take your case to a Subject Matter Expert. This body was created to help policyholders get justice in a time-bound, cost-effective manner.

4. Consider Legal Action in Serious Cases
If you’ve suffered major financial or emotional distress due to claim rejection, mis-sold insurance policies, or insurance claim-related issues, you may need to take legal action. A lawyer can help you claim compensation and ensure the insurer is held accountable.

5. Consult a Subject Matter Expert
If the process feels overwhelming, don’t hesitate to reach out to professionals who specialise in handling claim rejection-related issues, Complaint about Insurance company or reinstating lapsed insurance policies. These experts can:
● Interpret confusing policy language
● Help you gather the right documentation
● Negotiate a fair claim settlement
● Represent you in legal or regulatory proceedings if needed

Conclusion
Every day, countless policyholders face situations where their claims are unfairly denied, their policies are misrepresented, or their complaints go unheard. But staying silent only benefits the insurer.

The good news? You’re not powerless. With the right knowledge and the right support, you can challenge unethical practices and assert your rights.
The system isn’t perfect, but there are people and protections in place to help you through it. Stand firm, ask questions, and don’t settle for less than what you’re owed.

Because insurance is not a privilege, it’s a promise. And you deserve for that promise to be kept.